USD/JPY Forecast – Another Sideways Day For The USD Against The JPY

US Dollar vs Japanese Yen Technical Analysis

Taking a look at the US dollar against the Japanese yen you can see early during the trading session on Friday the market initially did try to rally but has pulled back a bit. Nonetheless, this looks very much like consolidation, and I think that’s all you can read into the chart.

The 149.80 yen level is an area that a lot of people had been paying attention to previously. So I do think there is a specific amount of market memory in that area. If we were to break down below there, then the 148.50 level is an area I’d watch right along with the 50 day EMA followed by the 147.33 level that all could offer support.

We are in an uptrend due to the interest rate differential, and that interest rate differential will continue to get you paid at the end of each day via swap. So therefore, longer term traders are doing what longer term traders do, simply hanging on to a profitable position. Above, we have the 152 yen level. This is an area that I think will cause a certain amount of resistance, but if we can break above there.

That would be a very bullish sign, allowing the market to go to the 155 yen level. Anything above there becomes more or less buy and hold, but quite frankly, that’s the nature of the market right now anyway. So, it would just bring in more buyers, in my opinion. Until the Bank of Japan can change its monetary policy, and it can’t anytime soon, it’s very unlikely that this is a market that will be able to break down for any significant amount of time. Although there will be speculation on Federal Reserve easing, which may cause some ripples along the way, it still is a positive swap. And as long as that’s going to be the case over the longer term, it does make a lot of sense that this pair would go higher.

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